Today is Black Friday in the US, the beginning of the Christmas shopping season and nearly 70% of Americans are expected to hit the online or traditional shops over the weekend. The pre-sales data indicate a better performance compared to last year; early numbers point at a solid 18% year-on-year increase in November sales so far. US households holiday spending could increase as much as 4% compared with last year, according to Bloomberg news.

The US dollar is quiet after having depreciated on Federal Reserve (Fed) meeting minutes earlier this week. The US yields have slightly improved, but the US 10-year yield remains near the critical 2.30% support (200-day moving average). The US equity futures are flat after having reached record highs before the Thanksgiving break. Provided the encouraging pre-sales data and the unusually high risk appetite in the US stocks this year, Black Friday could give traders a food reason for jumping on the back of a bull.

The USDJPY consolidates losses below 200-day moving average (111.50). More resistance is eyed at 111.91 (major 38.2% retrace on September November decline, former support turn resistance). Intra-day support is eyed at 111.05 (lower Bollinger band) as the slight improvement in the US yields could lend some support. Breaking this level, the decline could extend to 110.90 (major 50% retrace) and 110.70 (daily Ichimoku cloud base).

Gold is trading near the daily upper Bollinger band ($1295) on stagnant US yields. Tactical shorts could join between $1295/1300 and curb the positive momentum.

The AUDUSD rebounded from a five-month low and recovered to its mid-Bollinger band (0.7630) on the back of a broad-based weakness in the US dollar. Iron ore futures traded at the highest levels in two-months, giving a light support to the Aussie. The positive move could remain capped given that carry traders jump ship on vanishing rate differentials. Solid resistance is presumed near 200-day moving average (0.7708).

The euro is taking advantage of a quiet US dollar to gain territory. The pair advanced to 1.1859 (November high) in Asia. The next technical resistance stands at 1.1886 (major 61.8% retrace on Sep Nov decline). Eurozone yields recovered slightly yesterday; solid German and French flash PMI data helped. The European Central Bank (ECB) meeting accounts gave no clarity on what would happen posterior to September 2018, the deadline for the ECBs half-speed asset purchases program. Minutes revealed that some concerns were expressed that the open-ended nature of the asset purchases program might generate expectations of further extensions, yet the end date could be well justified in anticipation of further progress towards a sustained adjustment in the path of inflation on the basis of the better-than-expected growth momentum, diminishing risks and continued favourable financing conditions for the real economy. To summarize, the economic data will determine the faith of the ECBs Quantitative Easing (QE) program beyond the September deadline. This gives no extra clarity for traders who were seeking hints on what could happen in the continuation of the initial QE deceleration.

Gains in GBPUSD remained capped at 1.3337 (Oct 12 peak) on Thursday. The UKs 3Q second GDP estimate came in line with expectations, yet a closer look into the data revealed deteriorating exports (-0.7%) and lower fixed capital formation (+0.2%). There are some factors that could justify the UKs lower official growth forecasts in term. Support to the November rebound stands at 1.3265/1.3222 (minor 23.6% / major 38.2% retracement) and 1.3210 (50-day moving average).

WTI crude advanced to $58.58, but the latest news have not been encouraging. OPEC is unclear on the US shale production, which is crucial for planning its future production cuts. OPEC is expected to extend the supply cut agreement beyond March 2018 deadline, an extension to September looks like a plausible decision. Yet this is already fully priced in and traders should be ready for any pullback in prices if there are no significant adjustments on the quantities. Given the high level of market expectations, OPEC has little room to surprise at next weeks meeting.

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About the author

Ipek Ozkardeskaya is a senior analyst at MBAex with a solid experience in the financial industry. She has strong technical background in economics and quantitative finance. Previously, she worked as a senior market analyst in London Capital Group, FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.

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